Finance minister Harris Georgiades and the vice-president of the European Investment Bank Jonathan Taylor signed two agreements on Tuesday to finance two water management projects worth €55m.
The first loan worth €40m concerns the improvement of the water supply system in the wider area of Nicosia which “will enhance safety of supply and the quality of drinking water,” the European Union’s bank said in a statement.
Nicosia remained without water for a week in 2014 after its existing water supply system broke down due to a technical problem.
The second agreement will help finance the construction of a €15m flood protection system in Larnaca, affected repeatedly by floods over the past years. The project will include two pumping stations for rain water.
“Supporting adjustment to climate change is one of the main pillars of the EIB’s climate strategy approved by its shareholders last year, just ahead of the Paris climate conference,” the Luxembourg-based lender said.
Over the past five years, the EIB has extended a total of €1.3bn to Cyprus to finance projects in the public sector, transport, energy, education, waste treatment, and water supply. It has entered agreements with 10 banks to facilitate financing to small and medium size enterprises, the bank said. Last year it pumped into the Cypriot economy a total of €215m in financing.
Taylor said that the EIB remains committed to support Cyprus through the European Fund of Strategic Investment announced in 2014 by the chairman of the European Commission Jean-Claude Juncker. The Juncker fund aims at pouring up to €315bn in investment in the EU.
“One of the reasons why we have not yet signed an EFSI deal in Cyprus is that “the Cypriot government had been successful in supporting small and medium size companies as well as mid-capitalisation companies via other EIB schemes and other financial instruments, Taylor said. He added that the EIB’s instruments “are already working very well in Cyprus”.
“What more could be done for Cyprus to benefit from EFSI?” Taylor said. “EIB is actively looking for mature projects that are eligible for financing under EFSI. Any viable enterprise with mature investments, eligible for EIB financing, could contact us and we would be happy to hear from them and discuss EIB financing, under EFSI or otherwise”.
On Monday, Georgiades said very soon Cyprus will be included in the countries which have benefited from EFSI.